Douglas Olsen
The topic of whether universities subsidize graduate students is a complex one, with varying opinions and practices across different institutions and regions. Some sources suggest that universities subsidize graduate programs by paying graduate students, who often take on research or teaching assistant roles, to contribute to their academic departments. In contrast, other sources argue that graduate students pay tuition fees, especially for professional graduate programs, and that universities charge the highest price they can. The concept of indirect subsidies at public universities adds another layer of complexity, as these subsidies are challenging to quantify and may benefit high-income students more than their low-income peers. The debate around state subsidies for universities also factors into the discussion, with arguments for and against the impact of such funding on higher education accessibility and quality.
| Characteristics | Values |
|---|---|
| Do universities subsidize graduate students? | Both undergraduate and graduate students are charged tuition by the university. The tuition is used to pay faculty, administration, operating costs, etc. |
| Which students receive subsidies? | Undergraduate students who receive full or partial scholarships can be considered to be receiving a subsidy. Graduate students with teaching or research assistantships can also be considered to be receiving a subsidy, as their advisor has found external grant money that is used to pay their tuition and a stipend. |
| Who provides the subsidies? | Undergraduate subsidies are provided by the university, or by external sources such as scholarships. Graduate student subsidies are provided by external grants secured by their advisors. |
| Do states subsidize universities? | Yes, states provide subsidies to public universities. |
| Do state subsidies favor high-income students? | There is some evidence to suggest that state subsidies favor high-income students, as state lawmakers provide larger per-student appropriations to elite universities, which are more likely to be attended by high-income students. |
| Do states with high levels of university support have a high proportion of college graduates? | No, there is data to suggest that states with high levels of university support have a relatively low proportion of adults with degrees. |
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What You'll Learn
Indirect subsidies at public universities
The tuition and fees charged to undergraduates at public universities do not cover the full cost of education. This cost is offset by appropriations from state and local governments and other revenue sources, which are passed on to students through lower tuition. This is known as an "indirect subsidy".
Policy experts and journalists often look to state funding for public universities to estimate indirect subsidies. This approach suggests that indirect subsidies favour high-income students, as state lawmakers provide larger per-student appropriations to elite universities, which high-income students are more likely to attend. These universities also spend more per student. Conversely, lower-income students are more likely to attend less selective schools, which receive smaller appropriations and spend less per student.
However, this conventional wisdom has been challenged by studies that analyse indirect subsidies at public universities. These studies suggest that indirect subsidies at public universities do not favour high-income students. Instead, they find that subsidies for education expenditures decrease as student and family incomes increase. This is because low-income students are well-represented at public universities and tend to pay lower tuition due to tuition discounts, grants, and aid.
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Grants, scholarships, and loans
Graduate school can be expensive, with some programs costing over $100,000 in total. Fortunately, there are several funding options available in the form of grants, scholarships, and loans.
Grants are sums of money that you don't have to pay back. They are usually need-based and can be offered by the federal government, state government, an individual school, or a private organization. For example, TEACH Grants are awarded to graduate students who are training to become teachers in high-need fields in schools with low-income students. Fulbright Grants, on the other hand, are available to graduate students who wish to continue their international studies.
Scholarships are often merit-based and do not need to be repaid. Fellowships are a type of merit scholarship that usually covers tuition expenses. They are typically granted by the school itself and often have competitive applications. Graduate students can also work as teaching assistants or research assistants to help cover their tuition, although this can be time-consuming.
Loans are also an option for graduate students. Federal student loans are available, and graduate students can also take out private loans from organizations like Sallie Mae.
It is important to note that grants, scholarships, and fellowships may come with specific requirements and conditions, and it is essential to understand these before accepting any funding. Additionally, funding options may vary depending on the specific graduate program and the student's individual circumstances.
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State funding and subsidy distribution
Federal and State Funding
The federal government offers grants to graduate students based on financial need. Examples include the Teacher Education Assistance for College and Higher Education (TEACH) Grant, Fulbright Grants, and Iraq and Afghanistan Service Grants. Similarly, state governments may provide grants to graduate students residing in their state. For instance, the Colorado Graduate Grant offers up to $5,000 for eligible students, while the Ohio Department of Natural Resources provides $2,000 grants for earth science graduate students.
University Funding
Universities themselves are a significant source of funding for graduate students. They offer graduate assistantships, fellowships, scholarships, and institutional awards. Assistantships are the most common form of graduate support and include graduate teaching assistantships, graduate research assistantships, and graduate administrative assistantships. These positions provide a stipend, tuition waiver, and even health insurance. Fellowships are often based on academic achievement and research, while scholarships may have eligibility criteria such as a minimum grade point average.
Indirect Subsidies
Public universities provide an "indirect subsidy" to students. This occurs because the tuition and fees charged to undergraduates do not cover the full cost of education. State and local government appropriations, along with other revenue sources, offset these costs, allowing universities to charge lower tuition fees. This indirect subsidy is less transparent than direct grants and loans, and its value varies by school.
External Organisations
External organisations, such as professional associations and research councils, are another source of funding for graduate students. These groups often provide grants and scholarships to ensure a constant stream of highly educated workers in their respective fields. Training grants, for instance, are derived from agencies outside the university to support specific student learning experiences and research methods.
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High fees for graduate degrees
Graduate degrees can be costly, with total tuition for some two-year, full-time graduate degrees costing upwards of $100,000, and doctoral or professional programs often costing even more. Students at public schools can graduate with an average debt of $142,600, while those at private nonprofit institutions can graduate owing an average of $221,800. These high fees can be a significant barrier for students considering graduate school, especially those from low-income backgrounds.
The high cost of graduate degrees can be attributed to various factors, including the specialised nature of the programs, the additional resources and support provided to graduate students, and the smaller class sizes, which allow for more individualised attention. Additionally, some graduate programs may be offered by prestigious universities with a strong reputation, which can drive up the cost.
To cover these costs, many students take on debt through student loans. Loans issued to graduate students account for a significant proportion of federal student loans, with grad students making up only 15% of the higher education student population. This highlights the financial burden that graduate degrees can place on students.
However, it's important to note that a graduate degree can still be a worthwhile investment. Certain industries and higher-level positions require a graduate degree, and some fields, such as dentistry, law, and medicine, typically offer high salaries that may offset the cost of the degree. Additionally, graduate degrees can provide advanced skills and knowledge, enhancing career prospects and earning potential in the long run.
To make graduate school more affordable, students can explore various financial aid options. Scholarships, grants, academic fellowships, and assistantships can provide significant support. Some master's and doctoral programs are even fully funded, covering both tuition and living expenses. Online graduate degrees can also be a more affordable and flexible alternative to in-person programs.
In conclusion, while graduate degrees can come with high fees, they may still be a valuable investment for students' long-term career goals. With careful financial planning, students can make graduate school more accessible and ensure a positive return on their investment.
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PhD students and teaching work
While there is some debate about whether universities subsidize graduate students, it is clear that graduate students can and do subsidize their studies by taking on teaching work. Many PhD students teach during their doctorates to earn money and gain valuable experience. Teaching during a PhD can be an excellent way to expand one's horizons as a doctoral candidate, putting knowledge into practice in a new environment.
PhD students' teaching duties will largely depend on their research specialism. For example, PhD students in the Arts, Humanities, or Social Sciences departments may lead undergraduate seminars and tutorials, set tasks and readings, and provide grades and feedback for essays and exams. In contrast, those working in STEM fields may have more laboratory-based teaching responsibilities, such as demonstrating scientific methods and techniques for undergraduate and Masters students in a supervisory role.
PhD student teachers are typically employed on a semester-by-semester basis via fixed-term contracts. However, many universities offer graduate teaching assistantships, which are usually longer-term and more formal. While teaching is not usually a compulsory part of a doctoral program in the UK, it is often mandatory in other countries, such as the USA and the Netherlands.
Overall, teaching as a PhD student can be a rewarding experience that allows individuals to inspire groups of students in their academic discipline. It can also help PhD students discover gaps in their knowledge and improve their communication and presentation skills.
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Frequently asked questions
Graduate students are charged tuition by the university, which is used to pay faculty, administration, operating costs, etc. However, many graduate students are given research assistantships, meaning their advisor has found external grant money that is used to pay their tuition and provide them with a stipend.
An indirect subsidy is a form of student aid provided by public universities. The tuition and fees that they charge undergraduates do not cover the full cost of education, and appropriations from state and local governments offset a portion of these costs, which are then passed on to students through lower tuition.
High-income students are more likely to attend elite universities, which receive larger per-student appropriations from state lawmakers. These universities also spend more per student. As a result, high-income students receive more public money in indirect subsidies than their low-income peers.
Scholarships, grants, and loans are considered the major sources of student aid for graduate students. Additionally, graduate students may receive research or teaching assistantships that provide tuition waivers and stipends.
Not necessarily. A comparison of states with high and low proportions of personal income devoted to public higher education showed that the states spending the least had a higher percentage of adults with bachelor's degrees or higher.
